The quote above was made by Buffett in April 2022 to explain why he prefers to invest in income generating assets. The timing of the statement is meaningful. April 2022, as hindsight now tells us, was the peak of valuation for apartments. Does one of the greatest living investors have bad timing? I would argue he doesn’t rely on timing; he relies on time. Cash, for all its perceived safety, quietly loses value. Productive assets, by contrast, can adapt, grow, and compound over time.
With Buffett’s recent step down as CEO of Berkshire Hathaway, closing out a remarkable 60-year run, it’s an appropriate moment to reflect on the durability of that thinking. Even at 95, his perspective continues to shape how many investors approach long-term wealth creation. And for those of us who have followed his career, the learning hasn’t stopped.
At its core, Buffett’s philosophy is straightforward: Own businesses that produce goods and services people need – and hold them for the long term. Those businesses generate income, adjust pricing power over time, and ultimately provide a hedge against inflation. “Pieces of paper” like cash, or even passive holdings without underlying productivity, simply cannot do the same.